debtors is good, we are supporting companies because their liquidity is under stress,” he said.
Divakara said the sectors that are seeing most strain in cash flows are construction contractors, manufacturing companies, independent power producers and suppliers to government companies. SL Bansal, CMD, Oriental Bank of Commerce, said many companies seeking an extension in the debt collection cycle are small and medium enterprises. “The clients to whom many of the mid-segment companies supply goods to are under stress. This is leading to irregularities in receiving payments,” he said. Bankers say small and mid-sized companies also account for the largest number of defaults and NPAs in the system.